Explainer: What leverage do US, allies have over the Taliban? | Taliban News

Explainer: What leverage do US, allies have over the Taliban? | Taliban News

The United States and its allies could have left Afghanistan in the fingers of the Taliban however they nonetheless have “leverage” to make the armed group honour commitments to permit folks out of the nation, based on US President Joe Biden.

This was echoed by US officers and different Western leaders who imagine the Taliban could be pressured into abandoning their previous insurance policies with carrot-and-stick measures given Afghanistan’s outsized dependence on imported power, meals and international help, in addition to its shaky economic system.

Here are a few of the levers the West has to stress the Taliban to honour girls’s and human rights and cooperate with different international locations:

Multibillion-dollar reserves

The US has an outsized position to play in deciding what occurs to Da Afghanistan Bank’s (DAB) $9bn in gold and international forex reserves.

Of that, $7bn is held in the US, $1.3bn in different worldwide accounts and a few $700m by the Bank for International Settlements, based on a tweet by the Afghan central financial institution governor after he fled the nation.

After the Taliban takeover on August 15, the US authorities blocked the group from accessing any DAB belongings held by the Federal Reserve or elsewhere in the US, and the belongings stay frozen.

The International Monetary Fund (IMF) suspended Afghanistan’s entry to IMF sources on August 18, together with $440m in new emergency reserves.

Washington is below stress from some humanitarian teams, DAB officers, and international governments together with Russia to ease the asset freeze and permit some greenback shipments, a transfer that will seemingly include stiff circumstances.

A Russian official on Monday expressed the authorities’s concern that, with out fiscal sources, the Taliban could flip to narcotics or weapons trafficking to have the ability to assist the nation.

Reliance on imports

Afghanistan depends on imports for the lion’s share of the meals, gasoline and clothes consumed. It imported $8.6bn in items in 2019, topped by peat, wheat and petroleum, based on World Bank knowledge. Some 70 % {of electrical} energy is imported, at an annual value of $270m.

Taliban flags are seen at an unidentified location in a handout picture on social media [Social media handout/via Reuters]

The Taliban can’t pay for imports with out {dollars}; it had sufficient international forex reserves to pay for about two days of imports when abroad belongings have been frozen. The US and allies might situation entry to greenback transactions or reserves on Taliban insurance policies.

Foreign help

The US performs a serious position right here too, given its affect at each the IMF and the World Bank, which oversees the Afghan Reconstruction Trust Fund (ARTF), and due to the billions it has given the Afghan authorities and NGOs on the floor.

The World Bank reduce off funds to Afghanistan after the Taliban takeover, and the way forward for the ARTF is unclear.

Last week, the US Treasury issued a restricted new license for the US authorities and companions to supply humanitarian help to Afghanistan, a step that would encourage different governments to do the similar.

Before August 15, grants to Afghanistan totalled roughly $8.5bn a 12 months, or about 43 % of its GDP. They funded 75 % of public expenditure, 50 % of the finances and about 90 % of presidency safety spending.

Any resumption of Afghanistan’s entry to those sources is prone to be made conditional on Taliban cooperation with the worldwide neighborhood.

A Taliban soldier stands in considered one of the streets of Kabul, Afghanistan [WANA via Reuters]

Financial sanctions

The Taliban as a complete, and particular person Taliban leaders, is already topic to US and United Nations sanctions that successfully ban their entry to greenback transactions and the US monetary system.

Western monetary establishments are avoiding doing enterprise with the Taliban to keep away from operating afoul of US regulation. Unwinding these sanctions would require a prolonged and complicated course of by the US Treasury, administration officers say, however the division might grant licenses for extra transactions based mostly on Taliban cooperation.

Banking curbs

Pressure is constructing on Afghanistan’s non-public banking sector given the freeze in greenback shipments. All 12 banks working in Afghanistan require abroad banks to course of greenback transactions, and three are state-owned, making them immediately managed by the Taliban.

Citibank and others have halted such assist to keep away from any potential sanctions violations.

The Afghan-American Chamber of Commerce, which incorporates Afghan business banks and company buyers, is urging US officers to permit a restricted infusion of money to regenerate public confidence and keep away from potential panic and violence.

Remittances

Afghanistan additionally depends closely on remittances, with transfers residence by migrant staff abroad accounting for about 4 % of the nation’s GDP.

Western Union, the world’s largest cash switch agency, and Moneygram have each suspended their companies, shutting off the circulate of funds that many households depend on to pay for meals. Reopening these companies would require an easing of US monetary sanctions.

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